California Budget Draws Local Reaction

Consistent with a fiscally-prudent legacy Gov. Jerry Brown will leave behind after his final year in office, Wednesday’s unveiling of his $131.7 billion budget proposal was welcomed news to local lawmakers.

San Mateo County representatives cheered a spending plan that outlines filling the state’s rainy-day fund, increasing funding for schools, and allocating the first full round of new gas tax revenue toward transportation.

A $6 billion surplus is a welcomed indication California has busted through a mounting wall of debt identified when Brown returned to governor’s office in 2011. Still, local Democrats heeded caution about future uncertainties.

“I’m very pleased to see some unanticipated revenue. … I think that’s indicative of the ongoing economic recovery that’s continuing unabated — at least for the moment,” said Assemblyman Kevin Mullin, D-South San Francisco. “We are going to be devoting much of that unanticipated revenue to the rainy-day fund to continue a fiscally conservative approach.”

With election season ramping up as a pool of candidates vie to replace Brown, local lawmakers hope discussions about comprehensive tax reform and preparing for the next downturn will float to the top.

“Part of the reason we have this very large surplus is the same reason we had those very large deficits, and that is the volatility of our tax structure,” Mullin said. “We need to have a stable revenue stream regardless of what is happening with the broader economy. That’s probably a topic for another day, but it’s a glaring omission from the governor’s record.”

Changes to the federal income tax system, which have prompted discussions about workarounds in high-tax states like California and New York, could bolster efforts to tackle long-discussed structural budgetary challenges.

“Hopefully, the next governor comes in with a real desire to start that process. It’s not going to happen overnight, these are massive changes, but we’d be better off talking about it comprehensively as opposed to just cherry-picking certain revenue streams,” said Assemblyman Marc Berman, D-Palo Alto.

State Sen. Jerry Hill, D-San Mateo, said tax reform is long overdue and emphasized Brown can still use his tenure to make a difference.

“It’s difficult to do because you will always have winners and losers, but he has the political skill and the public support to be able to succeed in doing that. There’s still time so I would hope he would embrace that and do something there. That would be a tremendous legacy for him,” Hill said.